Hodgson believes that Loftus-Cheek, who is currently on World Cup duty, shares similar attributes to Ballack but feels that the 22-year-old is trickier than the former Germany midfielder.
"I think Ruben's internal midfield play is something that makes him very versatile," Hodgson told the Daily Mail. "I don't know what his best position is. It really depends how teams want to play.
"I'd say he goes by people more than Ballack did. But I think he's got Ballack's power and his pace and his strength - he's definitely got that.
"But he's maybe got more strings to his bow than even Ballack had. That's a bold thing to say, I know, but he's so good at going past people. He's got that deceptive turn of pace.
"In that way he's a bit like Jack Wilshere really. That ability to receive a ball in tight situations and then come out very quickly on the other side and open a game up."
Loftus-Cheek is expected to start for England in their Group G match against Panama on Sunday.